Analysis Of The Impact Of Non-interest Income On Business Risks Of City Commercial Banks

Interest rate liberalization,financial disintermediation,and intensified banking competition have made commercial banks that rely on traditional deposit and loan interest margins to continue to maintain their high profitability development goals.They may even weaken,and commercial banks are stabilizing and strengthening their own profitability goals.Starting to develop non-interest income to seek new development channels and profit growth points to form a diversified income structure to offset the decline in revenue due to the reduction of deposit and loan interest margins and to face a more open market for single operating businesses.The risk of uncertainty in the environment.Theoretically,based on the analysis of scope economic theory,economies of scale theory,and asset portfolio theory,the development of non-interest income forms a diversified business structure,which has a decisive effect on the decentralized effects of risks,but in fact city commercial banks are a unique form of China’s banking industry.It is a restructuring of some of the original urban credit cooperatives.Its business structure is relatively monotonous.The scope of services is mainly to deepen local and service communities.This results in fewer customer groups than other large and medium-sized banks.For local SMEs and local residents,their specificity exists after the reform.Based on this,this paper selects a special group of city commercial banks for further research on the relationship between non-interest income and bank risk.This article selects the relevant data from 19 city commercial banks for 2012-2016 with an asset size of more than 300 billion yuan as a sample of the study.The ratio of non-interest income and diversified income are used as indicators to measure the development of non-interest income and diversified income structure.From these two aspects,we examine the impact of non-interest business on the business risks of city commercial banks.First of all,this paper analyzes the development status of China City Commercial Bank and finds that CCB is currently vigorously developing non-interest business,and the non-interest income growth rate is also higher than the other two types of banks,indicating the development of non-interest business of city commercial banks.We have achieved good results.Secondly,this study finds that the empirical analysis results are inconsistent with the theoretical analysis results.From the theoretical analysis,the development of non-interest business has a decentralized effect on the business risk of citycommercial banks;however,from the analysis of empirical results,the non-interest income The growth will reduce the business risk of the city commercial banks,but it is not statistically significant;the diversified income structure has negative impact on the business risks of the city commercial banks,indicating that the diversified development of the city commercial banks will increase their business risks,and will not be statistically significant..The reason for the analysis is that the current level of non-interest business development of China’s city commercial banks is not high,and the scale is relatively small.Compared with the traditional business,the volatility is relatively large,which increases the instability of the business income of the city commercial banks.It operates diversified products for the purpose of improving profitability,and has insufficient control over risks.Therefore,this study believes that city commercial banks should still focus more on the interest business to further develop the interest business.